- Gulf naphtha exports to Asia reach 1.6 mnt
- West coast transfers improve sourcing options for Indian buyers
Increased naphtha exports from the UAE and Kuwait through ship-to-ship (STS) transfers outside the Strait of Hormuz are improving feedstock availability for Asian petrochemical producers, with some transfers taking place off India’s west coast, according to trade sources.
ADNOC and Kuwait Petroleum Corp (KPC) shipped nearly 1.6 mnt of naphtha in August and September, compared with around 700,000 t in March and April. Gulf suppliers have increasingly used alternative routes as Hormuz-related disruptions raise concerns over conventional shipping flows.
KPC has also conducted STS transfers off Vadinar on India’s west coast, providing an additional logistics route for Gulf-origin naphtha into the region.
India remains structurally dependent on naphtha
India’s naphtha market provides an important backdrop to the changing regional trade flows. The country produced around 17.9 mnt of naphtha in FY2024-25, while domestic consumption stood at approximately 13.15 mnt.
Petrochemicals accounted for around 87% of domestic consumption, equivalent to roughly 11.4 mnt, highlighting the importance of reliable naphtha availability for India’s olefin and polymer chains.
Source: PPAC, Ministry of Chemicals
Despite being a net exporter, India continues to import naphtha based on location, specification, availability and delivered economics. This makes Gulf supply flows relevant to Indian buyers even when domestic refinery production is sufficient in aggregate.
STS activity improves flexibility but raises logistics costs
Higher Gulf-origin cargo availability could give Asian crackers greater feedstock flexibility and reduce their exposure to direct Hormuz transit disruptions.
However, increased STS activity has also tightened vessel availability in the Gulf of Oman, potentially increasing freight and other logistics costs. This could partly offset the benefit of improved physical availability for buyers assessing delivered naphtha economics.
For India, alternative discharge and transfer routes along the west coast could provide additional sourcing flexibility, particularly for petrochemical producers that rely on imported or regionally sourced feedstock.
Landed economics remain key
The impact on Indian petrochemical producers is likely to depend less on aggregate domestic naphtha availability and more on the landed cost and reliability of Gulf-origin cargoes.
Sustained STS flows could improve feedstock availability and reduce supply disruption risks for Indian buyers. However, any renewed disruption to STS operations, vessel availability or Hormuz-linked logistics could increase freight costs and tighten regional naphtha availability.
The development therefore adds another variable to India’s naphtha procurement strategy, with west coast logistics potentially allowing buyers to diversify sourcing routes as Gulf trade patterns evolve.
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